The National Electric Power Regulatory Authority (NEPRA) has conditionally approved Pakistan’s controversial Integrated System Plan (ISP) 2025, covering the country’s electricity generation and transmission requirements for the 2025–2035 period.
The 11-year plan involves an estimated investment of around $58 billion in power generation and transmission infrastructure. However, NEPRA’s approval comes with several conditions and reservations raised by its members regarding the planning process, investment priorities, data reliability and potential impact on electricity consumers.
In its 45-page decision, NEPRA approved the ISP only to the extent of the revised base and recommended case of the Integrated Generation Capacity Expansion Plan (IGCEP) 2025. The approval does not cover the proposed Battery Energy Storage System (BESS) investments or K-Electric’s transmission line planned for 2028. The regulator also made its approval subject to the resolution of observations raised in the decision.
All three NEPRA members, including the chairman, recorded reservations and advisory observations. They questioned several changes made to the power plan and raised concerns about the inclusion and exclusion of certain projects. The members also questioned whether the Council of Common Interests (CCI) had been appropriately involved, given its constitutional role in national energy policy and planning.
NEPRA further noted differences between the positions of the Independent System and Market Operator (ISMO) and the Power Planning and Monitoring Company (PPMC), both of which operate under the Power Division. The regulator objected to changes made to the previous 10-year investment plan and maintained that major changes to the National Electricity Policy or National Electricity Plan cannot be made solely on the recommendations of a technical committee or the Power Division.
The ISP considered three electricity demand scenarios based on high, medium and low economic growth. The projected average GDP growth rates under these scenarios are 6.37 per cent, 4.95 per cent and 3.52 per cent, respectively. The low-growth scenario has been selected as the reference case for generation expansion.
Under the reference scenario, around 26,045MW of additional generation capacity is planned. Of this, 17,485MW has already been committed, while another 8,560MW has been identified for optimisation. Around 2,577MW of existing generation capacity is also expected to be retired, bringing total installed capacity to an estimated 62,657MW after the planned additions and retirements.
The reference plan also includes approximately 8,120MW of net-metering capacity. The estimated cost of additional generation capacity is around $47.08 billion, making generation the largest component of the proposed investment.
Transmission infrastructure is expected to require another significant investment. Ongoing and committed transmission projects are estimated at around $4.6 billion, while new transmission expansion projects would require approximately $6.05 billion. The total projected transmission investment therefore stands at about $10.65 billion.
The proposed transmission expansion includes power evacuation systems, network reinforcement, new extra-high-voltage substations, transformer upgrades and voltage-control facilities.
The plan also addresses electricity requirements in Gwadar and Makran, where electricity imports from Iran have been affected by regional geopolitical tensions. Because extending the national grid to these areas is currently considered technically and economically difficult, the plan allows for a 40MW on-site power plant to support the region.
NEPRA also raised concerns regarding renewable energy projects associated with K-Electric. Several competitive renewable projects had initially been excluded from the plan by ISMO, although a 269MW JCM Wind-Solar Hybrid Project at Dhabeji was later included for development during the current fiscal year.
The regulator also criticised ISMO for disclaiming responsibility for the accuracy and completeness of the data used in preparing the ISP. NEPRA said such disclaimers raised concerns about the reliability of the projections and information being used to support major investment decisions.
Another major issue is the proposed investment in Battery Energy Storage Systems. NEPRA declined to approve an estimated $900 million investment in BESS at this stage, saying a comprehensive technical and economic assessment was required. The assessment would need to determine the actual need for storage, appropriate capacity, operational requirements and cost-effectiveness.
The potential impact on electricity consumers remains another key concern. NEPRA noted that ISMO and PPMC presented conflicting assessments about how the ISP could affect consumer-end electricity tariffs. The regulator directed that the tariff impact should be properly calculated and incorporated into the main plan.
According to PPMC’s projection, the consumer-end base tariff could increase to Rs37.28 per unit by 2035, compared with Rs34 per unit in 2024–25. The tariff implications are therefore expected to remain an important consideration as Pakistan moves forward with its long-term electricity generation and transmission planning.
Overall, NEPRA’s conditional approval allows the ISP 2025 to move forward while highlighting significant concerns that need to be addressed before several major components of the plan can proceed.
